Sitting down to story time with Auburn West primary school students in Sydney on Wednesday, one bright spark asked Julia Gillard how much longer she had left as prime minister.

"Well, that's probably the question of the year," she said.

"I'm certainly hoping and fighting to make sure that I stay prime minister, but you'll have to ask me about that question after the 14th of September."

The PM was back in western Sydney - having spent a week there in March - to hold a community cabinet meeting and take the political pulse of some of the most marginal seats in the country.

Tony Abbott had been in the area just two days earlier, talking up tax cuts in Reid - a Labor seat the coalition expects to gain.

While western Sydney remains a key battleground, and tax and schools are likely to remain on the political agenda, a corporate decision this week swung the focus onto Victoria and the simmering issue of manufacturing.

Ford's decision to shut down its manufacturing in October 2016 was devastating news for 1200 workers and their families.

The company has deep roots, operating since 1925, and supports tens of thousands of spinoff jobs.

But the shock decision also opens a new political front in Geelong and northern Melbourne ahead of the September election.

Marginal seat research conducted in March showed Victoria was the strongest state for Labor in two-party terms.

There are a dozen Labor seats surrounding the two Ford plants, including the most marginal seat in Australia, Corangamite.

The prime minister, whose seat of Lalor is one of the dozen, was understandably quick to come out in sympathy for the workers and announce a $39 million assistance package in league with the Victorian government.

She pointed the finger at the high Australian dollar, which has made exporting more expensive, imports cheaper and squeezed the company's profits.

Former Victorian premier John Brumby also pointed out Ford had not done itself any favours in past years by abandoning the idea of making a diesel-fuelled Territory and exporting a left-hand drive version of it, or manufacturing the Ford Focus.

Abbott declared it a "black day for Australian manufacturing", saying Labor's taxes, red tape and pressure on electricity prices had made it harder for businesses to survive.

Gillard dismissed the idea that pay rises were to blame, saying Australia would never engage in a wages race to the bottom with China, Indonesia and Vietnam.

There are risks and opportunities for Gillard in the debate.

It gives Labor and its union base an opportunity to talk about the billions of dollars in industry assistance the government has provided, the creation of almost one million jobs in five years, as well as attack the coalition for its "survival of the fittest" approach.

But it also gives the coalition more ammunition in its argument that Labor has failed to get the economic basics right for business and has mishandled taxpayer money provided to car companies.

And it is something of a distraction for the prime minister, who is aiming to keep school funding at the top of the political agenda.

Gillard is adamant she can reach a deal with the states on her national school improvement plan - the so-called Gonski deal - by June 30.

With the NSW Liberal-Nationals government on board, the pressure is on Victoria and Queensland to sign.

The Labor governments in South Australia, Tasmania and the ACT are all poised to put pen to paper.

Rallies are planned across the country on Saturday - including in Abbott's Sydney seat of Warringah - to step up pressure on the state leaders.

Opposition education spokesman Christopher Pyne is sensing a political shift, and this week wrote a letter to the premiers in which he hedged the coalition's bets on the future of Gonski.

If a comprehensive deal was reached, an Abbott government would honour it, he said.

If not, the existing funding system would run for at least one and probably two years while new deals were negotiated, but based on Gonski principles.

It's another aspect of the coalition's strategy of neutralising issues ahead of the election.

Having accepted Labor's national disability insurance scheme, embracing Gonski would mean Gillard had little left on which to campaign.

And a vote for Abbott would be a vote for DisabilityCare Australia and Gonski, with the bonus of throwing out an "untrustworthy" government and dumping the carbon tax.

The Auburn school student appears likely to get his answer in just over 100 days.

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